India, which amended its patent laws for TRIPS-compliance in 2005, introduced a clause to ensure that pharmaceuticals did not block the entry of low-cost generic drugs. A year ago this clause blocked Novartis' patent application for its anti-cancer drug Gleevec. Now, in a major case that will have a profound effect on the affordability of essential medicines in India, Novartis is challenging this unique Indian provision

A division bench of the Madras High Court is set to hear a case that could potentially have a profound effect on the affordability of essential medicines in India and throughout the developing world. Swiss pharmaceutical giant Novartis AG is challenging the constitutional validity of a key provision in India’s Patents Act; a provision designed to ensure that frivolous 20-year patent monopolies are not granted at the cost of public health. If Novartis succeeds in this unprecedented challenge, India’s status as the primary supplier of low-cost essential medicines to the developing world will be jeopardised. More fundamentally, if it succeeds, it will mark the first time in history that a multinational corporation succeeds in legally abrogating a country’s sovereign right to implement its obligations under the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) in a manner consistent with the protection of public health.

The legal provision at issue – Section 3(d) of the Patents Act – is a provision unique to Indian law, and stipulates that modifications of already-known medicines cannot be patented unless such modifications make the drugs significantly more effective. This provision was designed to prevent an all-too-common practice in the pharmaceutical industry known as ‘evergreening’, whereby patent owners patent trivial modifications of already existing drugs to artificially extend their monopolies beyond the 20-year period granted it on the original patent. Pharmaceutical companies have been engaging in such practices in other countries, effectively blocking the entry of low-cost generics for years. India, which amended its patent laws to come into TRIPS-compliance in 2005, had the benefit of hindsight, and took proactive measures to ensure that such practices do not block the entry of affordable medicines in the Indian market.

Armed with this provision, the Cancer Patients Aid Association (CPAA) in September 2005 filed an opposition against Novartis’ patent application for its anti-cancer drug Gleevec, claiming that this application only concerned a modification of an already-known drug that did not improve its efficacy. Subsequently, in a landmark decision, the Patent Office in Chennai declared in January 2006 that Novartis’ patent application for Gleevec was insufficient to meet the requirements of Section 3(d), and denied Novartis a patent on this and other grounds, despite the fact that Novartis has already been granted a patent on Gleevec in 35 other countries.

The immediate consequences of this decision were remarkable. In 2004, Novartis had been granted an exclusive marketing right (EMR) for Gleevec, and obtained a court order preventing generic drug makers from selling their versions. A drug that had been available for Rs 8,500 to 12,000 per month – already out of reach for many – was then only available from Novartis, at an unaffordable Rs 125,000 per month. However, with Novartis’ patent application denied, the EMR automatically came to an end, and generic manufacturers were then free to resume sale of the cheaper versions, bringing renewed hope to the approximately 24,000 patients suffering from chronic myeloid leukaemia, who once again have easier access to this lifesaving drug.

The broader consequences, however, were perhaps even more striking. For the fist time after the amendment of the Patents Act, there was a clear indication from the Patent Office that this novel provision would be taken seriously, and that this provision could serve as an effective tool in the ongoing struggle for access to essential medicines. Following upon the CPAA’s success, other civil society groups – primarily the networks of HIV+ people – began filing oppositions against patent applications for key antiretroviral medicines and other drugs essential for treating AIDS. In the year that has passed since the Gleevec decision, subsequent events have demonstrated the importance of Section 3(d) in promoting access to medicines.

In March 2006, the Indian Network for People Living with HIV/AIDS and the Manipur Network of Positive People filed an opposition against GlaxoSmithKline’s (GSK’s) patent application for Combivir, an important fixed-dose combination of two of the most widely used antiretroviral medicines in the developing world. The substance of GSK’s patent application proved to be exceedingly silly, and is demonstrative of exactly the type of frivolous patenting that Section 3(d) was enacted to prevent. Essentially, GSK sought a 20-year monopoly for combining two already known drugs – lamivudine and zidovudine, neither of which are patentable in India – with something called a ‘glidant’, of which the preferred variety is silicon dioxide, better known to most people as sand. To be fair, it was not just sand that is the subject of GSK’s ‘invention’. It also included corn starch, talc, calcium carbonate (better known as chalk) and a host of other simple, commonplace substances that drug makers routinely add when making a drug in pill form. Remarkably enough, as with Novartis and Gleevec, GSK had already obtained a patent for this in the United States, the United Kingdom, and several other countries.

In the face of the strong opposition filed by the activist groups, and the sheer frivolity of its patent application, GSK announced in March 2006 that it would be withdrawing its patent application for Combivir, thereby allowing several Indian generic manufacturers to continue making their versions of this essential drug combination without fear of liability. The ripple effect of this decision spread beyond the highly politicised arena of AIDS treatment. Recently, GSK again announced that it would be withdrawing a patent application for a combination asthma drug, presumably to avoid setting negative precedent should the application be rejected on the basis of Section 3(d).

In contrast to GSK’s apparent strategy of withdrawing dubious patent applications in the face of Section 3(d), another global pharmaceutical manufacturer, US-based Gilead Sciences has taken a different approach. When HIV treatment activists and numerous Indian generic companies filed patent oppositions against Gilead’s application for the important AIDS drug tenofovir in May 2006, Gilead responded by announcing that it would offer voluntary licenses to Indian generic manufacturers to manufacture this drug at seemingly favourable royalty rates.

However, behind this apparently generous gesture from Gilead to offer licenses to generic manufacturers was an ingenious initiative to ensure that it would be able to retain exclusive rights over a product whose patentability under Indian law was in doubt. As an explicit condition of accepting Gilead’s voluntary license, generic manufacturers were required to withdraw their pending patent oppositions against tenofovir. In addition, these generic manufacturers were, by the terms of the license agreements, effectively locked into these royalty arrangements regardless of whether or not the patent for tenofovir was ultimately granted in India. Thus, even before Gilead’s rights over this drug were determined under Indian law, Gilead acted quickly to salvage a steady stream of royalty from risk-averse generic companies.

As these developments over the past year show, Section 3(d) of the Patents Act has had a real and measurable effect in promoting access to affordable generic medicines. Rather than risk unfavourable judgments in the Indian Patent Office on their dubious patent claims, some multinational pharmaceutical companies have chosen to tactically retreat from the aggressive patenting strategies that they have been able to pursue practically unabated in other countries. The end result of these retreats has been greater freedoms on the part of Indian generic manufacturers to continue India’s role as the major supplier of low-cost essential medicines to the developing world. With Novartis’ pending legal challenge to Section 3(d), however, the outlook in the coming years is far from clear.

In response to the Patent Office’s rejection of the Gleevec patent application, Novartis has taken the step of not only challenging the Patent Office’s denial, but also of challenging the validity of Section 3(d) itself, claiming that the section fails to comply with the requirements of TRIPS. This marks the first time the world over that a private entity has challenged the prerogative of a country to implement the TRIPS agreement in accordance with its public health priorities. The significance of this case is hard to overstate. Should Novartis succeed in its challenge, it will not only mark a significant step back in the struggle for affordable medicines, but it will mark the first time that the demands of a private multinational corporation have overridden a sovereign country’s right to protect the health of its people.

(Chan Park coordinates the Affordable Medicines and Treatment Campaign with the Lawyers’ Collective HIV/AIDS Unit in New Delhi. He has been actively involved in the patent opposition against Novartis’ Gleevec, as well as several other patent oppositions on essential medicines)